"That has been driven by the quality of the game and the marketing, which has been aimed at an older age group," he said.

UK sales of hardware and software are expected to total £1.5bn this year, about 15% to 20% higher than last year.

Many of these sales will be made in the Christmas season.

The importance of the Christmas period is evidenced by the fact that while Lara Croft publisher Eidos posted a third-quarter loss, it is widely expected to post healthy full-year results thanks to its Christmas sales.

Many agree that the games market is becoming less seasonal, with publishers spreading games launches throughout the year.

Christmas began in October

The battle lines for the Christmas sales were drawn as far back as October, when Sega launched Dreamcast.

Many say the Dreamcast console is make-or-break for Sega, which saw its market share plummet to about 1% after the failure of its Saturn console in 1995.

Christmas sales of Lara Croft games will help Eidos

So far, Sega says this Christmas has been good to them.

In the past two months, Sega has sold 500,000 Dreamcast in Europe. There have been 150,000 online registrations, with 40% of customers using Dreamcast to connect to the internet.

Sales of Dreamcast hardware are six months ahead of schedule according to Sega's European boss Jean Francois Cecillon, who says he expects to reach his first year European sales target of one million units by Easter.

But CTW's Ronnie Dungan said:"The launch of Dreamcast was never going to be about Sega becoming a market leader. The launch was about Sega getting its foot back into the market."

"Next year is the most important. They have a nine-month period when they have only Playstation to compete with. The big thing is when Playstation 2 is launched," he said.

Sony stays at the top

Sony's Playstation remains the dominant video gaming console with about 60% of the market.

Worldwide, over 70 million Playstations have been shipped since the console was launched in December 1994 in Japan and the following year in Europe.

While typically sales of the old console fall prior to launch of a new console, in the case of Playstation, sales have remained strong.

This is attributed to keen marketing and falling prices.

"Playstation has sold more hardware units than any year so far," a spokesman for the European Leisure Software Publishers Association, said. " People still perceive Playstation to be a good product."

Pokemon drives Nintendo sales

Nintendo's success story for 1999 has been Pokemon, a game which has revitalised the sales of Gameboy.

Already, expectations of sales have doubled.

"It is selling by the bucket-load. We expected to sell a quarter of a million by Christmas. Now it looks like we are going to sell half a million in that time frame," a Nintendo spokesman said.

"It is not a one-off Christmas fad. It is the fastest-selling gameboy game in the UK. It is outselling any other game we have got this Christmas," he added.

Gameboy primarily appeals to the 8-12 year-old market, as opposed to the 15-24 year-olds who are the focus of game console makers.

But such is the strength of demand for Pokemon that Nintendo believes it could entice players to buy the Nintendo 64 console. Pokemon Stadium - a version of the game to run on N64 - is to be launched in March.